Character AI files for bankruptcy in the US; Disney may buy some of its assets

Character AI, one of the most prominent services for chatting with AI characters, has filed for bankruptcy in the US. According to vc.ru, Disney may buy some of the company's assets. The filing follows a series of legal and regulatory problems: the claims concern copyright and the company's handling of underage users. The initial report does not name the amount of debt, the court or the terms of a possible deal, so details will have to wait for the court filings.

How the company got to bankruptcy

Character AI was founded in 2021 by Noam Shazeer and Daniel De Freitas, both former Google engineers. The idea is simple: users create or pick a character, anything from a fictional hero to a "psychologist," and hold an endless conversation with it. In 2023 the startup raised about $150 million at a valuation of roughly $1 billion, and by 2025 it was citing an audience of about 20 million monthly active users.

Then the trouble started. In 2024 a lawsuit was filed in the US after a teenager who had spent long stretches talking to a bot on the platform died by suicide. Other complaints from parents followed. In the same year, Google signed a licensing agreement and hired the founders along with part of the team. According to media reports, the deal was valued at about $2.7 billion. The company was left with the product, legal exposure and expensive inference infrastructure.

In September 2025, Disney sent the service a letter demanding that it stop using its characters. In November 2025, Character AI shut down open-ended chats for users under 18. For a service with a large share of young users, that hit engagement.

Why Disney is on the list of buyers

At first glance it looks odd: a studio that recently demanded the removal of its content is now weighing a purchase. But the logic is easy to see. Disney has an interest in controlling how its characters are turned into interactive bots. By buying selected assets, it could get the technology, the brand or the character catalog without taking on the whole history of lawsuits.

This is an assumption; there are no confirmed details of the deal. But in US practice, an asset sale in bankruptcy usually goes through the court, and competing bids can appear at an auction. A buyer typically picks the assets it wants and does not take on the liabilities wholesale. For a family brand like Disney, that matters: it is unlikely to want an archive of teenage conversations or open lawsuits.

The numbers

• 2021: Character AI is founded by former Google employees.
• 2023: a round of about $150 million at a valuation of roughly $1 billion.
• August 2024: a license for Google and the move of the founders, reportedly for about $2.7 billion.
• About 20 million monthly active users, according to the company's 2025 figures.
• September 2025: Disney's complaint over the use of its characters.
• 25 November 2025: ban on open-ended chat for users under 18.
• October 2026: bankruptcy filing in the US; the amount of liabilities is not disclosed.

What teams, investors and users should do

For developers of products with AI characters, the lesson is practical. Secure the rights to characters' likenesses before launch, not after a letter from the rights holder arrives. Build age verification into the architecture from day one, because a ban introduced after the fact hurts metrics and does not erase past lawsuits. Logs of conversations with minors also become a legal asset and a legal vulnerability at the same time.

Investors should look at the cost structure. A service that pays for inference, fights rights holders in court and loses part of its audience to restrictions does not carry a high valuation well. For users the advice is simpler: if you created characters and held long conversations, export your data and save your settings. In an asset sale, the fate of user content depends on the privacy policy and the court's decision, not on the audience's wishes.

What happens next will be determined by the case filings: who bids for the assets, which assets Disney would actually buy and what happens to user data.